Telecom Vs OTT: Voice Wars

“You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” – Buckminster Fuller.

Internet Telephony can only be provided by an internet service provider or Unified Access Licence holder,believes the cellular operators Association of India (COAI). “ Companies offering OTT(Over the Top) voice services,without holding a telecom licence in India,would essentially violate and circumvent Indian telecom licensing provisions and provide services that are otherwise only permitted under a telecom licence,” wrote Rajan Mathews,Director General COAI , in a letter to the telecom Regulatory Authority Of India (TRAI). OTT refers to video,television and other services provided over the internet.

CUG-2011-Survey-Results-12Benefits to Mobile Operators:

Telecom operators are concerned that WhatsApp, which has close to 70 million users in India, would soon start offering voice-over-Internet-protocol(VoIP) calls. This would allow a Whatsapp user to make a call to another Whatsapp use for free using a Wifi or a cellular data service. Customers till now have used VoIP to talk to their relatives and friends living and travelling abroad.

The Telecom Operators have not bothered until now, because International calls are a very small portion of their overall revenue . Once the services is available to millions and starts getting used locally, the situation will be different. Voice revenue is the mainstay of Indian Operators. “VoIP will lead to decline in voice revenue. It has already adversely affected the SMS revenue in India” says Neha Gupta, senior analyst at research firm Gartner.

ott-appsSimilar problems have surfaced in the past for telecom operators in other parts of the world. The matter was resolved by imposing rules and finding solutions that are mutually beneficial to both operators and OTT players .

Global Digital Economy:

In Germany, the regulator tracks the usage pattern of the top few communication apps and regulates them. In France, the government banned Skype and only allowed it to resume operations after the service was brought under regulation. South Korea charges a small fee for the services. U.S. consumers might get a break from the high costs of a pay-TV subscriptions starting this year when several major providers plan to introduce streaming video on-demand services in what the broadband industry calls over-the-top (OTT) programming.

“Our revenue streams are moving towards data services. Telecom industry is all for innovations among OTT and it is most welcome. It will be wrong to project…that telecom operators are against OTT” Gupta said on sidelines of Convergence India 2015.Telecom operators have raised concern over internet messaging and call services from applications like WhatsApp, Viber, Line and Skype are denting their revenues. Recently, Skype withdrew its option of voice calls within India. At this point, consumers are looking for apps which provide them with free calls within India. This option can be availed in Viber, Line. However Line started to promote its App with many free stickers and discounts in shopping websites using Line discount coupons and Viber tried a new marketing strategy with Brand Ambassador Programme to college students.

imagesTelecom Regulatory Authority Of India (TRAI) is working on a consultation paper which will address problems of both parties- the operators and the OTT players. Revenue sharing is a way of achieving this. “ Thirty percent of all OTTs around the world have some kind of revenue sharing model, but that does not exist in India. Where the revenue is shared the situation is much better” says a TRAI official on condition of anonymity.

1 New Telco 2.0 Framework April 2011Telecom operators will have to explore other options as well – just like they devised special packs exclusively for Whatsapp messaging and Facebook about a year ago. TATA Docomo,Airtel and Vodafone have introduced special recharge schemes for only whatsapp and Facebook which made them stand at a decent profits. It not only increased the usage of these OTT services, but also helped operators grow their data revenue.

tata-communications

Monetising OTT Services :

BHarti-Airtel-620x400Telco services could get as rich as HD voice and video. Or not? However lets hope the best services to consumers in best economical way because technology can only introduce us to a new magical world staying at the same place. How it (OTT services) can work in environment that is cohesive, and its complimentary, will be subject matter of this consultation. Let it be an open consultation like all consultation processes of TRAI. Many smart cities would create new business opportunities for telcos, vendors.Affordable mobile broadband got to be a means, not an end.

 

 

By Pavani Chennamasetti

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